London pre-open: Stocks seen up ahead of US earnings

London stocks were set to rise at the open on Thursday as investors eye more key US earnings.

The FTSE 100 was called to open 24 points higher at 7,180.

CMC Markets analyst Michael Hewson said: "After a fairly volatile session, US markets did close lower yesterday, however they did manage to close well off their lows, despite a decline in US 10-year yields, and a surge in US two-year yields, prompting the biggest inversion in this spread since 2000.

"With bond markets increasingly pricing economic slowdown equity markets are struggling to make sense of what comes next when it comes to valuations, with the first test coming later today with JPMorgan Chase Q2 earnings numbers.

"The second puzzle to navigate is how many more rate hikes are coming down the pipe before we see central banks cutting rates again.

"With US markets closing off their lows, and Asia edging higher, markets in Europe look set for a modestly positive open."

In corporate news, water supply company Severn Trent said it had made "a good start" to the year operationally, with the group now expecting to receive at least £50.0m in outcome delivery incentive outperformance payments in 2023.

Severn Trent added that as expected, it has also seen an increase in operating costs, particularly energy and chemicals, but also noted that it had benefitted from its "decade of investment" into renewable energy generation and generated 145-gigawatt hours of energy in the first quarter - over 50% of its total consumption.

Mining giant Anglo American has partnered with Japan's Nippon Steel to accelerate a transition to lower carbon steelmaking.

Anglo American said the project will also focus on studying the use of its iron ore in a "more carbon-efficient" direct reduction iron steelmaking method, which it estimates will generate "significantly lower emissions" than the standard routes of blast furnaces and basic oxygen furnaces.